New state budget challenge surfaces for Corbett

HARRISBURG — A drop in the amount of federal Medicaid matching dollars for Pennsylvania’s services for the poor and disabled could be the latest significant budget challenge facing Gov. Tom Corbett, administration officials said Tuesday.

Corbett’s Department of Public Welfare secretary, Beverly Mackereth, wrote Tuesday to the director of the U.S. Centers for Medicare and Medicaid Services out of concern that Pennsylvania will lose about $325 million in federal Medicaid funding next year.

In the letter, Mackereth asks the federal agency to check on an estimate that Pennsylvania’s formula-driven Medicaid matching funds will drop by 1.7 percentage points from the current federal fiscal year to the federal fiscal year that begins Oct. 1, 2015.

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Mackereth called that the biggest single decrease in Pennsylvania’s federal Medicaid match in decades and warned that cuts to benefits and payments to doctors and hospitals could result.

“If Pennsylvania were to lose over $325 million in federal funding for the Medicaid program, it will be incredibly challenging to continue to operate the current program and we would be forced to consider difficult cost-saving measures, including potential reductions to benefits and provider payments,” Mackereth wrote to CMS’ director, Cindy Mann.

A spokeswoman for the federal agency did not immediately respond to a request for comment Tuesday afternoon. Mackereth’s agency receives about $15 billion a year in federal funding for a wide range of safety-net programs and human services, primarily health care for the poor and nursing care for the elderly.

Corbett’s budget office estimates that the state is facing a $1.4 billion deficit in the state’s 2015 fiscal year that begins July 1, driven partly by rising public employee pension costs. An arbitration decision in a fight with tobacco companies also could cost Pennsylvania about $170 million that it was counting on next year.